Manufacture This

The blog of the Alliance for American Manufacturing

China’s Government Colluded in IP Theft, Allegedly

President Barack Obama and President Xi Jinping of the People's Republic of China walk on the grounds of the Annenberg Retreat at Sunnylands in Rancho Mirage, Calif., before their bilateral meeting, June 8, 2013. | Official White House Photo by Pete Souza

China's cyber theft knows no bounds.

The U.S. is expected to host China for an official state visit at the end of this month. And it seems the bilateral relationship gets more contentious by the day.

You know, currency manipulation, military ships in the Bering Sea, hacking the U.S. federal government, etc.

But today the news is about intellectual property (IP) theft.

American company Vringo discovered that ZTE, a Chinese telecommunications giant, had been using patented technology without paying for it, reports the Washington Post. When the U.S. company tried to sue, Beijing government officials got involved:

What followed, the company says, was an extraordinary mixture of deceit, protectionism and collusion on behalf of the Chinese company by Beijing government regulators, who then launched a retaliatory investigation into Vringo.

The U.S. company’s complaint, now being heard by a New York court, shows how China’s government, companies and even courts sometimes collude to abuse patent protection, discriminate against foreign firms and unfairly protect local businesses, U.S. business leaders say …

It also shows, business leaders say, how China’s industrial policy — and particularly its policy toward the technology sector — has become more nationalist and protectionist under President Xi Jinping, a development likely to cloud his state visit to Washington later this month.

This is only the latest incident of IP and cyber theft from Chinese companies and the government. The U.S. Department of Justice indicted members of the Chinese military for cyber espionage against five U.S. corporations and a labor organization in May 2014.

Cyber espionage will be a prominent topic during President Xi’s visit.